Gold imports in August remained elevated even as the yellow metal prices rebounded from multi-year lows.
Imports in the month are estimated between 85-100 tonne compared to 67 tonne in August, 2014, a rise of around 50%. In July this year, imports were 97 tonne.
Imports in first eight months of the calendar year are estimated to be 40% higher at 587 tonne year-on-year.
Trade sources said lower prices since the last week of July generated sudden demand for the yellow metal. Gold prices were trading lower, below $1100 per ounce since the last week of July. In Mumbai also, gold prices fell to around Rs 25,000 per 10 grams in the same period.
Traders also made note of the fact that tariff value on which duty is paid would be revised from mid-August as part of routine excercise. Hence, they placed huge orders in the first half of the month.
From mid-August, tariff value was increased from $354 per 10 gram to $363 per 10 gram. Tariff value for certain commodities like edible oil, precious metals, areca nuts, brass scrap and poppy seeds is revised every fortnight.
From September, the tariff for gold has been further revised upwards to $369 considering weak rupee and rise in gold prices.
While the increase in tariff value was not much, the difference was used to increase margins in a rising gold market.
Rise in August imports would also mean that total imports in the first five months of the current financial year has risen 19% to 370 tonne. This may not be cause of concern yet as prices are lower compared to last year and lower crude prices are keeping the current account deficit in check. But as gold imports are usually higher in the last quarter, total imports this fiscal may cross 1,000 tonne, according to experts.